Stock Market for Beginners

How to Invest in the Indian Stock Market

Stock market investing is as easy as buying a product from Amazon, but you should understand the risks of investing in the stock market before buying any share.

How to Start Investing in the Stock Market in India

You need to have a bank account, demat & trading account and internet connection to operate demat account. It’s easy to place a buy order, but it’s hard to know which share to buy. I have explained in a separate article how to screen and filter the best shares to buy for the long term in the Indian stock market. Always keep in mind, the risk with buying a share,

You should invest only that money in the stock market which you don’t need for the next 5 years because it takes time to get good returns from the stock market. Set aside your emergency fund and short-term goal’s money. Don’t ever buy stocks with borrowed money. You can never predict the direction of the stock market. It’s better to be safe than sorry.

As a beginner investor, it’s more important to learn how to select the good stocks in the initial days. You can invest more money into the stock market once you learn the art of picking profit-generating stocks. Allocate your surplus money to invest in the stock market and invest only 10% of that in stocks initially. That will minimize the risk in case you pick wrong stocks in your initial days of investing.

7 Steps to Invest in Stock Market

1. Open a demat account

Open a demat account with one of the best demat account brokers in India. You can also negotiate the brokerage charges or choose a discount broker that charges fixed brokerage fees on every trade.

2. Log in to demat account

You can access your demat account through a web portal or mobile app. Get your username and password from your broker.

3. Transfer funds to your demat account

Transfer funds from your bank account to demat account using UPI, NEFT or online banking option.

4. Select a stock trading below its intrinsic value

Learn value investing and select a fundamentally strong stock. Don’t invest in companies where you can’t understand their business model. Check the integrity of management, strong balance sheet, low debt and future growth perspective.

5. Buy the stock

You can place a buy order using a limit price or market price.

6. Check transaction status

You can see if your stock order is pending in the order book. All the transaction records can be seen in the transaction book on the completion of the order.

7. Check the portfolio